22 April 2011 18:38 [Source: ICIS news]
HOUSTON (ICIS)--US methyl ethyl ketone (MEK) producers are seeking 15 cents/lb ($331/tonne, €228/tonne) contract increase effective 1 May on continuing supply constraints, sources confirmed on Friday.
Already, gains of 5 cents/lb effective 1 April were implemented, moving contract prices to $1.10-$1.14/lb, as assessed by ICIS.
In the meantime, initiatives of plus 5 cents/lb effective around 20 April were still firming. “But as tight as material is,” a buyer said, “it supports the early and mid-month price efforts.”
If successful, recent initiatives would yield increases totalling 25 cents/lb for the 1 April-1 May period and take contract levels to as high as $1.29 or $1.30/lb.
Customers expected higher pricing, but said spot offers have been heard throughout the $2/lb range, although there were no confirmed deals at that level. Drummed spot material was confirmed in a range of $1.50-1.70/lb, but spot offers higher than that were still considered price gouging, buyers said.
Sources said MEK imports to the
As happened in early 2010, some participants were expected to soon exit a market that has become prohibitive because of escalating prices and a lack of supply.
Buyers see little reason for market optimism.
“I feel sure that some producers are getting ready to set control quantities on a monthly basis,” a buyer said. “And I’m not sure the issues lie just with tightness, but just as much with rising costs.” Some end users will shut down due to cost, the buyer added. “It’s looking bad to me at this point.”
Japan-based Maruzen Petrochemical's MEK plant, which was shut down after a quake-related fire, may be unlikely to restart for a year, although other company facilities had restarted or were expected to do so in the very near term.Asia-based distributors said supply from
Meanwhile, “a lot of domestic demand has been prompted by the rise in prices,” a buyer said. “Folks are trying to buy ahead of the big one [price increase] in May.”
US MEK suppliers include ExxonMobil, Shell and Sasol.
($1 = €0.69)
For more about MEK go to ICIS chemical intelligence
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